Execution of Improved Patents

Scenario:

Company A has a formerly granted patent PA on product P1 while company B has a latter granted patent PB on product P2, which is am improvement on product P1.

Solution:

Normal execution of the above patents is as follows:

If A wants to manufacture P2, then A has to get a license from B, however, if A does not want to manufacture P2, there is no obligation for it to do so. But the most common situation is that because P2 is improved over P1, A feels like to manufacture P2, too, in order to make more benefits, let's say as an example.

If B wants to manufacture P2, in spite of its having the patent on P2, B has to get a license from A for manufacturing P1, too, though in fact what B produces is absolutely P2 but not P1. The reason why B has to get a license from A for manufacturing P1 is that PB falls within the claimed field of PA despite PB's improvement over PA.

So, typical solution is more often like this:

A gets a license for manufacturing P2 from B, meanwhile B gets a license for manufacturing P1 from A which then makes B be able to implement its patent PB. It's usually called a 'CROSS-LICENSE'.

What should 3rd party do?

As to a 3rd party that wants to manufacture P2, it has to get license both from A and B, of course, or else it may be sued by A or B. If it just wants to manufacture P1, a license from A only is enough.

Keywords: patent improvement license cross-license

P.S.: here, 'it' in this article means nothing offending just for representing convenience.

What Is the Protection of Business Names Under Intellectual Property Law?   Hire Patent and Trademark Attorney to Accelerate the IPR Procedure   Every Innovative Irish Idea Deserves to Be Protected Correctly in Law   Intellectual Property Infringement and Patent Law